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March 2016    Download the Entire Issue (PDF) Available to the Public Vol. 31, No. 3   RSS Feed for Undercurrent Issues
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Why are Dive Boats Still Making Fuel Surcharges?

from the March, 2016 issue of Undercurrent   Subscribe Now

The crash in the price of oil will have all manner of economic repercussions, and one would think, keep liveaboard prices down. But long time Undercurrent correspondent Mel McCombie (New Haven CT) writes " I have two trips coming up (February--Caribbean Explorer, St. Maarten--St. Kitts) and April (Provo.) Both are charging a $200 fuel surcharge. I could see this a year ago, but now?"

Airlines often buy their fuel years in advance, so cannot always respond so quickly to a sudden drop in oil prices. However, this should not be the same for liveaboard operators, who are more likely to buy fuel when it's needed. The international price for marine diesel tends to be the same everywhere unless it is subsidized (as it is in Egypt), although some areas of operation may mean vessels need to pay local taxes, which can escalate the price. However, a surcharge implies an additional cost in respect of extenuating circumstances so Undercurrent took a straw poll of vessel operators elsewhere in the world.

These were typical responses:

Mike Ball of Mike Ball Dive Expeditions in Australia said, "Our standard expeditions have been free of fuel surcharge for about eight years. We do 2 or 3 exploratory expeditions that involve significant extra travelling that we list as $44 dollars subject to change. It's a joke that operators charge a generic fuel surcharge while fuel costs are down."

Alexander Bryant of Constellation Ventures in the Maldives told us, "We have fuel surcharges for special trips where we have to buy fuel outside of Male, so that includes all trips to far southern atolls."

Frank van de Linde of the Siren Fleet (Dive & Sail Worldwide) was jocular. "Regarding fuel surcharge, no we don't do that kind of stuff. We have never done and will never do either -- unless it's maybe above US$200 a barrel. However when it's reaching that price, both you and I will not be in the diving industry anymore."

Alan at Undersea Hunter fleet (Costa Rica) responded, "Do we add any fuel surcharges? No, we do not, especially as fuel prices are quite low right now. If in the future fuel prices skyrocket, then we might need to charge it, but let's hope that does not happen."

We suggest readers check the price of a trip when they book it and query why there would be an additional cost in the form of a fuel surcharge if one is added.

Clay McCardell of Explorer Ventures, the operator of the vessels booked by Mel McCombie, tells us, "Fuel cost is a difficult issue, since it is often our largest single expense and is highly variable. When we budget operational costs, we can plan on fairly predictable increases in most of our costs, but fuel is a wild card. Instead of charging a higher package price across the board, we set our package prices based on an average fuel budget for the year, and then use the flexibility of the fuel surcharge in order to try and meet that budget. That helps us to guarantee reasonable package pricing a minimum of 12 months in advance (often longer), with the understanding that the surcharge can and will vary depending on local fuel costs up until 30 days prior to the trip."

He continued, "If oil prices remain stable and the Caribbean catches up with the USA, I'd anticipate a reduction of the fuel surcharge to zero soon."

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